Chipotle, Chagee among new arrivals at Shinsegae Gangnam's Sweet Park

Lotte, Hyundai Seoul boost sales with niche perfumes, pop-up stores

Sector eyes accelerating growth in second half, with first 4-trillion-won store in sight

A temporary construction wall signals the arrival of new tenants at the Sweet Park dessert hall on the basement level of Shinsegae Department Store's Gangnam branch, Wednesday afternoon. [Kim Jin]
A temporary construction wall signals the arrival of new tenants at the Sweet Park dessert hall on the basement level of Shinsegae Department Store's Gangnam branch, Wednesday afternoon. [Kim Jin]

On Wednesday afternoon, a mysterious construction wall stretched along the basement level of Shinsegae Department Store's Gangnam branch, just beside the Five Guys outlet inside the Sweet Park dessert hall. A "Staff Only" sign hung on the partition as a handful of workers moved briskly in and out.

The space is set to become the second Seoul location of Chipotle, the American Mexican food chain. Next to it, another temporary wall announced the coming arrival of Chagee, the global milk-tea brand that originated in China. Shinsegae said the changes are part of a rolling renovation of some Sweet Park tenants that opened in February 2024, with new stores set to open in stages during the second half of the year.

South Korea's department store industry, enjoying a record-breaking boom, is aggressively recruiting global food and beverage brands — part of a broader effort to enrich in-store content and tap into shoppers' appetite for "small luxuries."

Shinsegae's Gangnam branch is renovating a section of Sweet Park on its basement floor, according to industry sources Thursday. Starting as early as the end of this month through August, the Japanese premium raw-doughnut brand I'm Donut will open first, followed in sequence by Chagee, Chipotle and Van Leeuwen, an American premium ice cream brand.

Sweet Park, which debuted in February 2024 as South Korea's largest dedicated dessert hall, continues to sharpen its competitive edge. When it launched, Shinsegae undertook what was then the industry's largest food hall renovation — spanning about 6,000 pyeong (1 pyeong equals 3.3 square meters), or roughly 19,800 square meters — with an eye toward drawing more foot traffic and extending how long customers linger.

Sweet Park sales from January through May rose 26 percent year-on-year, according to Shinsegae, while overall food hall sales climbed 25 percent. "Many customers who come in for food and beverage end up making purchases at other stores, and quite a few visit F&B outlets while waiting to enter luxury boutiques," a Shinsegae official said.

Lotte and Hyundai Department Store are also rolling out strategies to draw customers. Lotte Department Store has operated a premium niche-perfume zone on the ground floor of its Jamsil branch's main building since June 15, consolidating more than 20 niche fragrance brands — including Kilian and Ex Nihilo — that had previously been scattered across the Avenuel wing, the main building and Lotte World Mall. Perfume sales at the Jamsil main building jumped 65 percent in the week from the zone's opening day through June 21, compared with the week before.

Hyundai Department Store is running a "Global K-Content Fair" at Hyundai Seoul, operating large-scale pop-up stores targeting foreign tourists across multiple floors, covering K-pop, fashion, beauty and food. The event also includes back-to-back album-release pop-ups for idol groups Hearts2Hearts and Ateez. Sales at Hyundai Seoul rose 31 percent year-on-year during the fair, which ran from June 20 through June 24.

The industry expects growth this year to outpace last year's. Some analysts say a single store could post annual sales in the 4 trillion won range, alongside the prospect of a store crossing 1 trillion won ($650 million) in annual sales from foreign visitors alone. "Demand that had shifted online is coming back to physical retail, making fresh attractions and experiences more important than ever," one industry official said. "We will keep bringing in new brands."

Meanwhile, the Ministry of Trade, Industry and Energy's monthly retail trend data for May showed that offline retailers, including department stores, posted sales growth of 9.3 percent year-on-year last month — outpacing online sales growth of 8.8 percent over the same period. It was the first time offline sales growth had exceeded online since April 2023.

A customer browses fragrances at the niche perfume zone on the ground floor of Lotte Department Store's Jamsil branch. [Lotte Department Store]
A customer browses fragrances at the niche perfume zone on the ground floor of Lotte Department Store's Jamsil branch. [Lotte Department Store]

soho0902@heraldcorp.com